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<Research>G Sachs: Risk-Reward for CN Insurers to Improve; 3Q Earnings May Beat Forecasts
Recommend 36 Positive 57 Negative 24 |
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Chinese insurers have underperformed since the end of July, with H-/ A-shares declining by an average of 2%/ 6% each, while the HSI and the CSI 300 Index rallied by 8% and 14% during the same period, according to Goldman Sachs' research report. This is believed to be due to the high valuation levels following the rebound in stock prices since early April and the weak earnings growth outlook caused by the high base effect in 2H24. Looking ahead to the upcoming 3Q25 results, Goldman Sachs believed that the risk-reward for Chinese insurers is improving, and anticipated that 3Q25 earnings may beat expectations driven by equity investment gains. The new business value for 2026 may see double-digit growth, while the contractual service profit margin is expected to reach a turning point. Among Chinese insurers, Goldman Sachs expected CHINA LIFE (02628.HK) to benefit the most from changes in the stock market and yields in 3Q25, followed by CHINA TAIPING (00966.HK). NCI (01336.HK) may exhibit the strongest earnings growth, although its book value and solvency ratio may lag behind peers. The broker also upgraded CPIC (02601.HK) from Neutral to Buy, and CHINA TAIPING from Sell to Neutral. AASTOCKS Financial News Website: www.aastocks.com |
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